~Community Association Law~
~ TIMESHARE~Appellate Practice~
JC Fuller, PA AV Rated
Florida Supreme Court Certified Arbitrator
Home 407-641-5292
407-964-1487/fax
COMMON COMMUNITY QUESTIONS ....about collection$
Q: HOW LONG WILL IT TAKE FOR A LAWSUIT TO BE FINISHED?
A: All legal actions take TIME. There is no basis in reality to expect that cases can or will resolve themselves in a matter of months. Typically, mortgage foreclosure and/or collection lawsuits will require a minimum of six (6) months of work before they will eventually go before a judge. All time-frames are based upon the actions of the parties. If a homeowner does not answer a lawsuit, the lawsuit should take less time to be resolved. If a homeowner answers a lawsuit, the case will take longer, and the time will depend on the actions of the defendant and his/her lawyer.
Finally, due to the massive amounts of mortgage foreclosure lawsuits, coupled with the funding cutbacks, courts are having a difficult time in scheduling hearings and trials in an expedited fashion.
Promises of a quick outcome should never be made in any case, and each individual situation is governed by its own unique set of facts and circumstances.
Q: WHAT IS A GOOD OPTION FOR COLLECTING PAST DUE ASSESSMENTS ON A PROPERTY THAT IS IN COLLECTION AND/OR MORTGAGE FORECLOSURE, WHEN THERE IS A TENANT OCCUPYING THE PREMISES?
A: Issue a legal demand for RENT INTERCEPT. This demand must go to the tenant and to the homeowner. The lawyer or management company is not permitted to disclose the balance due on an account to a tenant or third party without the homeowner's advance written consent. Therefore, it is our law firm's practice to issue a separate collection letter to the homeowner, which accompanies the copy of the RENT INTERCEPT letter. This collection letter to the homeowner advises the owner of the balance past due and includes a detailed accounting of all costs, fees, assessments and payments. There is no risk in issuing the RENT INTERCEPT letter, except for the cost of the letter.
Q: WHAT SHOULD WE DO WHEN A COLLECTION ACCOUNT IS IN MORTGAGE FORECLOSURE?
A: The Association has several options in collecting past due assessments on an account in mortgage foreclosure:
i) PURSUE LIEN FORECLOSURE and seek to own the property. If the Association wants to be the owner of the property and secure a paying tenant, it can certainly do so whether or not the property is in mortgage foreclosure. The Association can try to recover its past due assessments by collecting rent once it takes ownership of the property. The association can pay the mortgage, or not pay the mortgage. If the property goes into MORTGAGE FORECLOSURE, the Association will continue to own the property until such time as the Bank or some other party takes TITLE at a JUDICIAL SALE.
Pro's: possible recovery of all past due amounts including legal fees in rent collection.
Con's: no guarantee of finding a tenant, no guarantee of rent collection, no guarantee of recovering all past due assessments including attorneys fees, additional costs of professional management of the property unless the Board takes on that responsibility.
NOTE: Always check with the Association's insurance carrier to make sure that the property and the Board are both adequately covered by insurance.
ii) PURSUE LIEN FORECLOSURE and work with an investor who will take title to the property if no THIRD PARTY BIDDER takes title at the JUDICIAL SALE.
Pro's: the investor will be responsible to pay the association's future assessments immediately upon taking title; the investor will manage the property; the investor is bound by all of the rules and regulations that govern the association; the investor may negotiate a price to defray some or all of the attorneys fees, and some or all of the past due assessments depending on the facts and circumstances of each individual case.
If a THIRD PARTY BIDDER takes TITLE at the LIEN FORECLOSURE JUDICIAL SALE, the Association will recover 100% of all past due amounts including attorneys fees and costs.
Con's: the investor may not pay the past due assessments or the attorneys fees depending on the agreement that is reached between the association and the investor.
iii) SEEK TO EXPEDITE THE MORTGAGE FORECLOSURE SALE. This option requires the Association's lawyer to prepare the case for trial, notice the case for trial, and work diligently with the court system to obtain a TRIAL DATE. The JUDGE sets the Trial Date. Once the TRIAL DATE is established and the trial is held, an ORDER is entered and a JUDICIAL SALE DATE is set by the judge.
Remember: the JUDICIAL SALE is held at the courthouse or online, and is where bidders seek to purchase the property.
THERE ARE NO GUARANTEES AS TO WHEN A TRIAL WOULD BE HELD. EACH COUNTY HAS ITS OWN SPECIFIC PROCEDURE.
Pro's: When the Bank or a THIRD PARTY BIDDER takes title at a JUDICIAL SALE, it is required to pay (a portion, all or none of the past due amounts, and) all future assessments.
Con's: Sometimes these cases can linger for a period of years, depending on the county where they are filed.
Q: WHAT HAPPENS WHEN A HOMEOWNER FILES BANKRUPTCY?
ALL LEGAL ACTIVITY AND DEMANDS FOR PAYMENT, RENT INTERCEPT, MORTGAGE FORECLOSURE, LAWSUITS, COLLECTIONS, AND ALL OTHER ADVERSARIAL ISSUES INVOLVING THE DEBTOR MUST CEASE UNTIL THE BANKRUPTCY CASE HAS CONCLUDED OR THE BANKRUPTCY COURT HAS GIVEN PERMISSION FOR A CASE OR ACTION TO CONTINUE.
This is why it is very important for the community and its management to work closely with the Association lawyer in all events where a bankruptcy has been filed.
The contents of this website are for educational purposes and do not constitute legal advice. Please seek the advice of a lawyer.
